The rally since early April has pushed major stock indexes beyond their short-term trading ranges, according to an analysis by Channel Trend, a Dallas-based technical market research firm.

"We would not advise being a net buyer of stocks with the major stock market measures all positioned above the tops of their channels," the firm said. On the other hand, investor sentiment appears to be improving, Channel Trend reported.

Gasoline futures hit a record high in late trading as the official start of the summer driving season approaches.

Gold continued to retreat from a sharp price spike posted last Friday and Monday. Gold for June delivery fell $1.50 an ounce, to $284, after hitting $298.60 Monday.

News that Republican Sen. James Jeffords of Vermont plans to bolt the GOP prompted daylong speculation about the investment implications of a Senate controlled by Democrats.

On the one hand, Republican tax and regulation policies generally favored by Wall Street might be thwarted.

On the other, a balance between the conservative Republican House and a Democratic Senate might foster Capitol Hill gridlock, thereby shifting economic policy power back toward the Federal Reserve, which investors claim to prefer.

In particular, the tax cut being pushed by the Bush administration will produce negligible economic stimulation this year, especially compared to Fed rate cuts.

Late Wednesday, Jeffords postponed an announcement of his decision.

Treasury securities ended mixed, ahead of a speech on the economy Thursday by Federal Reserve Chairman Alan Greenspan. Greenspan is to speak to the Economic Club of New York, where he has made market-moving comments before.

Many economists are backing away from their predictions of a recession, but the manufacturing sector remains weak.

An official of chemicals giant DuPont told a Goldman Sachs conference that the first quarter was bad and "in the second quarter we have seen further negative developments in markets that are sensitive to discretionary spending."

European double play: Investment conditions in Europe were hit this week by two unrelated blows--an unexpected pickup in inflation in Germany, and the reconstitution of a major global stock benchmark that penalizes European equity markets.

The euro fell to a six-month low against the dollar on news of sluggish economic growth in Germany and France, compounded by higher inflation numbers from Germany. The inflation reports are expected to prevent the European Central Bank from cutting short-term interest rates in the near future. The bank left rates unchanged at Wednesday's meeting.

Meanwhile, Morgan Stanley Capital International, as expected, redefined its widely followed stock market indexes to decrease the weighting of stocks in several European countries and increase the weighting in the United States.

The change reflects the fact that shares of many major European companies are not actively traded. Under a so-called free-float index measurement adopted by Morgan Stanley, these shares are not counted as part of a country's tradable equity capital. As a result, stock portfolios that track the index are selling European shares.